DETROIT — General Motors on Wednesday reported first-quarter net income of $3 billion and said it still expected to earn as much as $11 billion in adjusted earnings for the full year despite the microchip shortage that is hampering production industrywide.
GM’s earnings in North America increased 43 percent from a year earlier to $3.1 billion, despite the automaker having to shut down output at some plants. The company said it expected continued downtime in the coming months because of the shortage but that it would be profitable in the second quarter on an adjusted basis.
CEO Mary Barra said the company expected to finish the first half of the year with about $5.5 billion in adjusted earnings before interest and taxes, including $4.4 billion earned on that basis in the first quarter.
“We are also reaffirming our guidance for the full year,” Barra said in a letter to shareholders, “and based on what we know today, we see results coming in at the higher end” of the $10 billion to $11 billion range for adjusted earnings GM previously forecast. Barra, on a call with analysts, said she expected the business to begin recovering from the chip shortage after the second quarter.
GM’s outlook for the year is more optimistic than the guidance given last week by Ford Motor Co., which earned $3.3 billion in the first quarter but projected little profitability for the remainder of the year, citing the supply issue. GM projects the chip shortage to cost it $1.5 billion to $2 billion, while Ford estimated a $2.5 billion hit and 1.1 million units of lost production.
GM’s $3 billion in net income compares with a $286 million profit in the first quarter of 2020, when the coronavirus pandemic halted production across the industry. Its adjusted profit margin surged to 13.6 percent, compared with 3.8 percent a year earlier, as a result of the company’s newly redesigned full-size SUVs, full-size pickup pricing and high used-vehicle prices.
Global revenue fell 1 percent last quarter to $32.5 billion, while adjusted earnings before interest and taxes nearly quadrupled.
GM shares rose 3.9 percent to $57.50 in premarket trading.
The company earned $308 million from its international regions, compared with a $551 million loss a year earlier. China equity income rose to $3 million from a loss of $2 million a year earlier.
Earnings from GM Financial increased to $1.18 billion, up from $230 million a year earlier.
